By Waylon Cunningham
Sept 30 (Reuters) - Starbucks' strained relationship with its US union is facing fresh scrutiny from a shareholder proposal filed Friday by New York City's comptroller that has not previously been disclosed.
The proposal, which follows identical filings by the New York state comptroller and Trillium Asset Management, asks the coffee chain's board to reinstate a dissolved committee that oversaw labor relations. The investors argue the company has neglected the issue under CEO and company chair
Brian Niccol.
A copy of the proposal reviewed by Reuters describes labor relations as one of Starbucks' "most significant and persistent risk areas." It highlights the absence of a labor agreement with the union representing US baristas nearly five years after workers at the first store organized in Buffalo, New York. Based on recent estimates, the union represents about 5% of US stores.
"We're well into Brian Niccol's tenure at Starbucks and this issue has not gone away," Jonas Kron, chief advocacy officer at shareholder Trillium Asset Management, said in a phone interview. "The board will function best when particularized risks like this get the attention of a committee," he said.
The filers collectively hold nearly $270 million of Starbucks shares, according to recent ownership figures provided by a spokesperson for the New York City comptroller's office.
RISK TO TURNAROUND EFFORTS?
Starbucks said in a statement it was confident the board "has the necessary skills and experience to effectively oversee our strategy." The company's shares are up 13% this year, and Starbucks often says it offers the "best job in retail".
Starbucks created the Environmental, Partner and Community Impact Committee in 2023 to oversee labor relations and other social issues after pressure from some of the same shareholder groups behind the latest proposal.
Niccol became CEO and board chair in September 2024, and the committee was dissolved in November 2025. Starbucks said in an investor presentation in March that the committee's responsibilities were redistributed because the board determined oversight would be "stronger and more integrated" that way.
Several of the current filers previously cited the committee's dissolution in a failed effort to unseat two directors at Starbucks' shareholder meeting in March.
The campaign nevertheless attracted support from shareholder proxy advisers, which warned investors that Starbucks could be overlooking risks linked to labor relations, including strikes and a $38.9 million settlement paid to New York City over alleged staff-scheduling violations. Last month, the union urged consumers to boycott the chain until a contract is reached.
Starbucks has also faced pressure beyond Wall Street. In May, UN human-rights experts urged Starbucks and the US government to respond to allegations that the company had conducted a years-long campaign against workers seeking to unionize. US lawmakers also pressed Starbucks late last year to reach a labor agreement with the union.
Elsewhere in the industry, Blue Bottle Coffee and a union representing baristas at nine stores in Massachusetts and California ratified a first contract earlier in September, according to the union. Blue Bottle was sold by Nestle earlier this year to China-based Centurium Capital, which also owns Luckin Coffee.
Starbucks Workers United backed the shareholder proposal, saying in a statement that "investors should take a hard look at how the company's long list of unsettled labor issues" may be negatively affecting Niccol's turnaround plan.
Starbucks typically holds its annual shareholder meeting in March.
(Reporting by Waylon Cunningham. Editing by Christian Plumb and Mark Potter)
